STATE OF NEW YORK
INSURANCE DEPARTMENT25 BEAVER STREET
NEW YORK, NEW YORK 10004

George E. Pataki
Governor

Gregory V. Serio
Superintendent

The Office of General Counsel issued the following opinion on March 31,
2004, representing the position of the New York State Insurance Department.

Re: No-Fault Coverage - Out-of-State Vehicle

Question Presented

When a pedestrian is struck by a motor vehicle operating in New York,
and such vehicle is registered out-of-state and insured by an insurer not authorized to do
business in New York, but such insurer is a wholly-owned subsidiary of a Canadian
corporation with two other carriers that are wholly-owned subsidiaries and are authorized
to do business in New York, must the out-of-state vehicle injuring the pedestrian provide
the pedestrian with No-Fault coverage?

Conclusion

Yes, in accordance with Insurance Law Section 5107(a).

Facts

The inquirer describes a case in which a New York resident pedestrian
was struck in New York by an automobile licensed and registered in Florida while operating
in New York. The inquirer represents that the insurer, A, is a wholly-owned subsidiary of
a Canadian corporation, B, but that A is not licensed to do an insurance business in New
York. However, the inquirer also represents that B has two other wholly-owned
subsidiaries, C and D, which are insurers are licensed to do business in New York.

The inquirer further stated that A has refused to provide No-Fault
benefits to the injured pedestrian by apparently contending that under the policy of the
Florida vehicle, No-Fault benefits are only provided to the named insured and resident
relatives while occupants of the insured vehicle outside of Florida.

ANALYSIS

Before analyzing the specifics of the inquirers question, it must
be made clear that under Article 6 of the New York Vehicle & Traffic Law, the
"Motor Vehicle Financial Security Act", N.Y. Veh. & Traf. Law § 319
(McKinney 2004), the owner of a motor vehicle operating on a public highway of New York,
whether or not the owners policy is issued in New York, must have financial security
in place in accordance with the requirements of New York law. One acceptable form of proof
of such financial security is an owners policy of liability insurance (which
includes New York mandated No-Fault benefits). If such financial security is not in place
when a motor vehicle is operated in New York, both the vehicle owner and driver are
subject to penalties under Sections 318 & 319 of the Vehicle and Traffic Law.
Therefore, out-of-state vehicles operating in New York under policies which do not provide
for the payment of No-Fault benefits to eligible injured persons are operating in
violation of New York law.

N.Y. Ins. Law § 5107(a) (McKinney 2004) of the No-Fault law states
that with respect to coverage for non-resident motorists, "Every insurer authorized
to transact or transacting business in this state, or controlling or controlled by or
under common control by or with such an insurer, which sells a policy providing
motor vehicle liability insurance coverage or any similar coverage in any state or
Canadian province, shall include in each such policy coverage to satisfy the financial
security requirements of article six or eight of the vehicle and traffic law and to
provide for the payment of first party benefits pursuant to subsection (a) of section five
thousand one hundred three of this article when a motor vehicle covered by such policy is
used or operated in this state (Emphasis added).

In the situation the inquirer presents, A, though not licensed to do
business in New York, is under the common control of B, along with two other insurers who
are licensed to do business in New York and must meet all minimum financial requirements
required under New York law. Therefore, pursuant to Section 5107(a), A is also required to
meet all New York financial requirements when a vehicle it insures is operating in New
York. It must be concluded that, under the facts the inquirer presents, A is obligated to
provide No-Fault benefits to the injured pedestrian.

For further information one may contact Supervising Attorney Lawrence
M. Fuchsberg at the New York City Office.